Hudson River Park Nears Key Phase

November 28, 2011

Hudson River Park Nears Key Phase

The Wall Street Journal 11/21/11

By JOSEPH DE AVILA And PETER GRANT

A $200 million plan to convert a 900-foot Hudson River pier near the Meatpacking District into a retail, entertainment and park complex is about to take a major step forward by entering the city’s land-use approval process.

For more than five years, city officials and others have been studying what to do with Pier 57, which has been used at various times as a dock for ocean liners, a bus depot and a holding pen—for protesters arrested during the 2004 Republican National Convention. The highlights of the current plan, developed by the Hudson River Park Trust, include a rooftop park and a novel “work-sell” space for aspiring retailers, artists and others.

Set to move into the land-use approval process early next year, the plan has made more progress than previous proposals. Still it is moving forward at a time of economic uncertainty, posing hurdles for the Trust and the developer it chose in 2009, Youngwoo & Associates.

For starters, they must get approvals from the city for a plan that includes close to 300,000 square feet of markets, restaurants and other commercial space. Youngwoo also must sign enough commercial leases to put together a private financing package for the project.

If all goes well, ground will be broken on the project in 2013 and it will open in 2015, according to Madelyn Wils, chief executive of the Hudson River Park Trust. Youngwoo “has a record of getting their projects financed,” Ms. Wils said in an interview.

The Hudson River Park Trust was created by the city and state to oversee the five-mile riverfront between 59th Street and the southern tip of Manhattan. The park is about 60% completed. The entire stretch is now open to pedestrians and bicyclists, but much of the grand plan is on the drawing board.

The Pier 57 development is seen as a key part of the plan partly because it would unite the Chelsea Piers area to the north and Greenwich Village to the south with a major attraction. Pier 57 also is critical because the entire five-mile park is expected to be self-sustaining.

The Trust is hoping that “a little less than a quarter” of its commercial revenue in the future comes from its Pier 57 lease with Youngwoo, said Ms. Wils, a former city economic-development official who took over as the Trust’s chief earlier this year. “Everything helps,” she said.

Earlier this year, the Trust reported that it had a budget shortfall of about $10 million, according to its proposed budget for fiscal year 2012 available on its website. Trust officials said they have since secured lease payments from long-term tenants that have erased the shortfall; they said its 2012 budget is balanced.

In 2005, the Trust chose a different plan for redeveloping Pier 57, proposed by developer Steve Witkoff and the Cipriani restaurant group. But that plan failed to move forward.

Youngwoo has been active in Chelsea developments. Founded by Young Woo, a Korean-born architect, the firm won the 2009 bidding contest for Pier 57 with a plan that included permanent space for the Tribeca Film Festival and an open-air market run by Urban Space Management, known for running the Union Square outdoor market and the Dekalb Market in Brooklyn.

The retail idea behind Pier 57 is similar to Dekalb: Businesses would be housed in refitted shipping containers that would give them space for both selling and manufacturing. “Think of them as retail incubators…for people with more business savvy than those in flea markets but not ready to rent the store in SoHo or the Village,” said Ms. Wils.

Greg Carney, a principal at Youngwoo, said the Pier 57 commercial attractions will be designed to be dynamic and changing, “so there’s always a reason to go again.” For example, restaurants will feature cooking classes and demonstrations while national fashion companies will use the unconventional space to test new brands.

Mr. Carney acknowledged that the project faces challenges in terms of leasing and obtaining construction financing. He also said there are a number of complications because it hasn’t yet gotten city approvals. Approvals need to be obtained before Youngwoo can enter a formal lease with the Trust, he noted.

Local officials and community board members have rallied around the project, saying an upgraded Pier 57 would be a welcome addition to that part of Chelsea, which earlier was in serious decay. “When I was a kid, you didn’t even want to go to the waterfront,” said Robert Benfatto, district manager of the local community board.

There is one concern: parking. The High Line has already pulled in many more visitors to the area. “We just need to be sure that any economic development project is able to integrate into the neighborhood as seamlessly as possible,” said state Sen. Tom Duane, who represents the area.